THE  “J U UL”  ACT 


ITS  HISTORY 

AND  PRACTICAL  OPERATION 


A  TALK  BEFORE  THE 
JOHN  MARSHALL  LAW  SCHOOL 
BY  COLIN  C.  H.  FYFFE 

DECEMBER  16,  1904 


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HISTORY  AND  PRACTICAL  OPERATION  OF 

THE  “ JUUL ”  ACT. 


The  Juul  Act  is  known  in  the  Statutes  as  an  act  entitled 
“An  Act  Concerning  the  Levy  and  Extension  of  Taxes/’  approved 
May  9,  1901,  in  force  July  1,  1901.  The  whole  object  of  this 
Act  is  to  reduce  the  aggregate  rates  of  taxation,  with  certain 
exclusions,  to  5  per  cent,  of  the  assessed  valuation.  As  a  matter 
of  fact,  it  is  directed  at  Chicago  alone,  for  there  are  so  many 
exclusions  from  the  reduction  except  in  cities  of  100,000  popula¬ 
tion  or  more  that  there  is  no  reduction  in  the  State  except  in 
Chicago.  I  think  I  will  be  able  to  show  you  that  the  Act  has 
certain  very  bad  features  from  a  financial  point  of  view.  I  shall 
also  take  the  liberty  to  discuss  the  question  whether  the  Juul  Act 
as  it  stands  to-day  under  the  decisions  of  the  Supreme  Court  of 
this  State  is  a  constitutional  Statute. 

Now,  I  will  explain  something  about  the  history  of  the 
Act.  I  have  already  told  you  that  the  Revenue  Act  of  1898  was 
desirable  because  of  the  bad  system  which  existed  before  that 
time  for  the  assessment  of  the  value  of  taxable  property.  The 
prime  object  of  the  Act  of  1898  was  to  bring  out  and  make  sub¬ 
ject  to  taxation  much  more  personal  property  than  had  been 
reached  previously.  The  object  was  principally  personal  prop¬ 
erty.  For  many  years,  real  estate  had  been  getting  much  the 
worst  of  it,  as  a  payer  of  taxes.  From  about  1891  until  almost 
the  present  time — at  least  until  1898 — there  had  been  great  de¬ 
pression  in  the  value  of  real  estate  in  this  city.  It  was  difficult 
to  sell,  and  when  sold  the  price  was  not  what  it  had  been.  In  the 
meantime,  the  value  of  real  estate  for  purposes  of  taxation  was 
being  steadily  put  up  by  the  assessors.  I  know  cases  in  the  down- 


p  35463 


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town  district  where  the  taxation  in  1894,  a  year  after  the  panic, 
was  more  than  50  per  cent  higher  than  taxes  on  the  same  prop¬ 
erty  had  been  in  1891,  although  the  value  of  the  same  property 
had  fallen  off  in  the  same  time  40  or  50  per  cent.  Taxes  were 

-  *  <  i 

piled  high  upon  real  estate  because  the  real  estate  was  in  sight; 
and  in  times  of  depression  it  is  much  more  difficult  to  get  at  a 
man’s  unseen  personal  property  than  it  is  to  do  that  in  times  of 
prosperity.  Moreover,  the  people  had  acquired  a  bluntness  of 
conscience  which  enabled  a  man  to  state  untruths  under  oath 
with  regard  to  the  character  and  amount  of  his  personal  prop¬ 
erty  if  he  was  not  likely  to  be  found  out.  Anyway,  real  estate 
was  getting  more  than  its  fair  share  of  the  tax.  Therefore,  came 
the  law  of  1898,  which  we  have  already  discussed  in  a  former 
talk,  instituting  the  Board  of  Assessors  and  the  Board  of  Review. 
Now,  it  was  thought  that  people  would  come  forward  much 
more  readily  with  the  true  schedules  of  their  personal  property 
if  they  knew  that  there  would  be  a  lower  limit  to  the  tax  rate. 
As  part  of  the  general  scheme  of  the  Act,  and  indeed  as  a  very 
essential  part  of  it,  Section  49  was  passed.  This  section  was 
the  forerunner  of  the  Juul  Act.  That  part  of  the  section  com¬ 
pelling  the  reduction  of  the  aggregate  rates  reads  as  follows : 

“In  counties  containing  one  hundred  and  twenty-five  thou¬ 
sand  (125,000)  or  more  inhabitants  the  amount  to  which  any 
county,  city,  township,  school  district  or  other  municipal  cor¬ 
poration  shall  be  allowed  to  become  indebted  in  any  manner,  or 
for  any  purpose,  shall  not  hereafter  exceed  two  and  one-half  per 
cent,  on  the  assessed  value  of  the  taxable  property  therein,  to  be 
ascertained  by  the  last  assessment  for  State  and  county  taxes 
previous  to  the  incurring  of  such  indebtedness.  In  any  munici¬ 
pality  or  taxing  district  in  any  county  or  counties  containing  a 
population  of  125,000  or  more  inhabitants  in  which  the  aggre¬ 
gate  of  the  levies  or  taxes  certified  to  the  County  Clerk  exceeds 
five  per  cent,  a  reduction  shall  be  made  by  the  County  Clerk  in 
the  taxes  so  certified  so  as  to  reduce  the  aggregate  of  such  taxes 
to  five  per  cent,  in  the  manner  following,  viz : 

“The  rate  of  county  taxes  throughout  the  county  shall  be 


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fixed  by  reducing  the  aggregate  rate  of  taxation  in  the  munici¬ 
pality  or  taxing  district  within  the  county  in  which  such  aggre¬ 
gate  rate  is  the  highest  to  five  per  cent,  by  a  pro  rata  reduction 
of  all  the  levies  certified  therein,  exclusive  of  the  State  taxes. 
The  rate  of  each  of  the  other  kinds  of  tax  levies  shall  be  fixed  in 
the  same  manner,  taking  the  highest  rate  of  taxation  in  any  part 
of  the  municipality  or  other  taxing  district,  or  part  thereof,  as  the 
basis  of  ascertaining  the  rate  of  taxation  to  be  levied  by  such 
municipality  or  taxing  district,  and  making  the  rate  of  taxation 
within  the  limits  thereof  uniform,  and  reducing  the  aggregate 
rate  of  taxation  in  each  district  in  which  it  exceeds  five  per  cent, 
to  five  per  cent.” 

The  first  thing  to  be  noticed  is  that  Section  49  applies  only 
to  Cook  County,  as  Cook  County  is  the  only  county  in  the  State 
having  a  population  exceeding  125,000.  Another  noteworthy 
point  in  Section  49  has  nothing  to  do  with  the  reduction  or  with 
the  Juul  Act,  but  I  want  to  call  your  attention  to  it  because  it 
shows  the  animus  of  the  section,  and  the  short-sighted,  I  might 
say,  cheap  policy  which  lay  behind  it.  In  counties  containing 
125,000  or  more  inhabitants  no  municipality  may  become  in¬ 
debted  beyond  2 per  cent,  on  the  assessed  valuation.  That  is 
a  cut  of  one-half  on  the  limit  of  5  per  cent.  I  am  told  that  this 
provision  never  received  proper  discussion  in  the  Legislature. 
There  is  a  story,  the  truth  of  which  I  cannot  vouch  for,  that  this 
reduction  of  the  limit  of  indebtedness,  was  run  in  late  in  the 
night  before  the  passage  of  the  bill.  Today,  it  is  hard  to  believe 
that  such  a  measure  could  have  found  any  supporters.  If  it  had 
any  real  supporters  then,  public  opinion  now  has  completely 
veered  around.  Today,  one  of  the  chief  reasons  for  a  new  charter 
is  that  the  city’s  indebtedness  may  be  increased  and  that  certain 
great  public  improvements  may  be  made,  which  can  only  be  made 
out  of  the  proceeds  of  bond  issues.  If  Section  49  had  been  allowed 
to  stand,  the  indebtedness  feature  of  it  would  have  crippled  Chi¬ 
cago  permanently. 

Now  we  come  to  the  reduction  of  the  aggregate  rates  under 


6 


Section  49.  Let  us  consider  what  the  County  Clerk  was  required 
to  do.  He  first  must  put  aside  the  State  rate,  which  is  protected 
by  the  Constitution,  and,  second,  the  rate  for  school-building-  pur¬ 
poses  which  the  Act  itself  in  a  proviso  excluded  from  the  reduc¬ 
tion  ;  then  the  County  Clerk  enquires  whether  there  is  any  mu¬ 
nicipality  or  taxing  district  in  the  county  in  which  the  aggregate 
of  the  rates  or  levies  certified  to  him  exceeds  5  per  cent  of  the 
assessed  valuation.  If  he  finds  any  such  district  or  districts,  he 
proceeds  to  reduce  the  rates  to  5  per  cent,  as  follows :  He  first 
finds  the  County  rate  by  reducing  the  aggregate  rate  in  the  dis¬ 
trict  of  the  County  where  the  aggregate  rate  is  the  highest  to 
five  per  cent,  by  a  pro  rata  reduction  of  all  the  rates  except  the 
two  excluded.  This  fixes  all  the  rates  levied  in  the  particular  dis¬ 
trict.  The  County  Clerk  then  finds  the  district  where  there  is  the 
next  highest  aggregate  rates.  If  any  of  the  rates  fixed  in  the  first 
reduction  are  in  this  second  district,  they  are  still  considered 
fixed,  and  are  not  subject  to  any  further  reduction.  This  is 
because  of  the  Constitutional  provision  that  the  taxes  levied  by 
any  corporate  authority  must  be  uniform  within  the  jurisdiction 
of  the  body  imposing  the  tax.  Hence  the  county  rate  must  be 
the  same  all  over  the  county ;  the  city  rate  must  be  the  same  in 
Rogers  Park  and  Austin  and  everywhere  else  in  Chicago.  But 
the  aggregate  rates  will  differ  in  different  parts  of  the  same 
taxing  body.  The  Chicago  rate,  that  is,  the  rate  levied  by  the 
City  Council,  extends  all  over  the  city ;  so  does  the  County  rate, 
because  the  city  lies  wholly  within  Cook  County.  But  the  rate 
levied  by  the  Sanitary  District  did  not  then  cover  the  extreme 
northeast  part  of  Chicago.  On  one  side  of  a  street  a  man  paid 
the  Chicago  rate  and  the  Sanitary  District  rate  too,  because  he 
lived  in  both  municipalities.  Across  the  street  a  man  lived  in 
Chicago  and  paid  its  rate,  but  was  outside  the  territory  of  the 
Sanitary  District.  Hence  the  rate  of  the  Sanitary  District  did 
not  affect  him.  Outside  the  city  limits  to  the  southwest  you  pay 
the  Sanitary  District  rate,  but  not  that  of  the  city.  Taking  the 


7 


rates  made  in  the  first  reduction  as  fixed  for  good  and  all,  the 
County  Clerk  then  reduces  those  of  the  next  highest  district  to 
5  per  cent,  and  so  the  process  is  continued  until  the  rates  through¬ 
out  the  County  have  been  all  reduced — except  in  those  places 
where  no  reduction  is  necessary  because  the  aggregate  rates  do 
not  exceed  5  per  cent.  This  would  be  either  because  the  aggregate 
original  rates  as  levied  did  not  exceed  5  per  cent  or  because  the 
previous  reduction  of  the  County  and  other  rates  left  the  remain¬ 
ing  rates  unaffected. 

The  first  assessment  made  under  the  new  Act  was  in  1899. 
Hence  in  the  first  week  of  January,  1900,  the  County  Clerk 
started  out  to  ascertain  where  was  the  greatest  aggregate  rate 
and  to  make  the  reduction.  In  examining  the  rates  all  over  the 
County  he  found  that  the  place  where  the  aggregate  rate  was 
highest  was  in  the  southern  part  of  the  Village  of  Riverside.  If 
you  will  look  at  a  map  of  Cook  County  you  will  see  that  the  Town 
of  Lyons,  which  lies  just  south  of  the  Town  of  Proviso  (in  which 
latter  town  Riverside  is  mainly  situated)  contains  a  part  of 
Riverside.  Roughly  speaking,  it  is  that  part  of  the  Village  of 
Riverside  which  lies  south  of  the  C.,  B.  &  Q.  tracks  at  the  depot 
and  is  bounded  on  the  south  by  a  loop  of  the  Desplaines  River. 
I  should  say  from  recollection  that  it  does  not  contain  as  much 
as  one-half  square  mile  of  territory.  It  is,  of  course,  in  the 
County;  it  is  also  in  the  Village  of  Riverside,  in  the  Town  of 
Lyons  and  in  the  Sanitary  District,  which  latter  at  that  time  levied 
under  the  law  a  tax  three  times  as  great  as  now.  In  addition  to 
all  these  taxes  there  was  a  road  and  bridge  tax  levied  throughout 
Lyons  and  there  were  two  school  taxes.  One  was  a  rate  of  1.57 
per  cent,  for  School  District  No.  5.  There  was  also  a  high  school 
tax  in  Riverside  of  .87  per  cent.  One  or  the  other,  I  forget  which, 
of  these  taxes  was  said  at  the  time  to  represent  a  temporary  im¬ 
provement  in  the  educational  system.  The  amount  produced  could 
not  have  been  more  by  reason  of  the  increase,  than  $1,000,  or 
$2,000,  but  the  result  was  to  make  this  little  territory  the  spot  in 


8 


Cook  County  where  the  aggregate  rates  were  higher  than  any¬ 
where  else — a  trifle  higher  than  in  the  Town  of  West  Chicago, 
which  had  the  next  highest  aggregate.  So  it  came  about  that 
in  order  that  Riverside  might  have  this  small  increase  in  its 
taxes — because  in  order  to  produce  a  few  thousand  dollars  out 
of  a  very  small  assessed  valuation  you  must  have  a  rate  of  a 
size  that  would  produce  perhaps  many  hundred  thousand  dollars 
in  the  City  or  the  Sanitary  District  or  the  County — the  City  and 
the  County  and  the  Sanitary  District  had  to  lose  hundreds  of 
thousands  of  dollars.  This  seems  incredible.  This  is  how  it 
happened.  The  County  Clerk  first  put  together  all  the  rates  in 
that  territory  which  had  the  highest  aggregate  rates ;  that  was  in 
this  little  territory  at  Riverside.  They  amounted  to  about  ~y2 
per  cent.  He  then  reduced  them  to  5  per  cent,  as  before  ex¬ 
plained,  taking  the  proper  proportion.  When  the  rates  were 
all  reduced,  the  sum  of  the  rates  would  be  5  per  cent.  You  now 
have  fixed  several  rates.  You  have  the  County  and  the  Sanitary 
District,  both  of  which  enter  into  the  aggregate  rates  in  the  City 
of  Chicago.  But,  as  I  have  explained,  you  must  have  the  same 
rate  for  the  County  everywhere  in  the  County.  You  must  have 
the  same  Sanitary  District  rate  everywhere  in  the  Sanitary  Dis- 
trict ;  hence  those  rates  fixed  at  Riverside  were  fixed  not  merely 
as  the  County  and  Sanitary  District  rates  at  Riverside,  but  as 
the  rates  of  those  two  taxing  bodies  all  over  their  respective  ter¬ 
ritories.  That  is  the  first  part  of  the  process  in  showing  how 
Chicago  and  the  County  and  the  Sanitary  District  were  affected. 
The  second  is  this :  It  became  now  the  duty  of  the  County  Clerk 
to  fix  the  rates  in  the  next  highest  district.  The  next  highest 
district  in  the  year  1899  was  the  Town  of  West  Chicago.  The 
County  Clerk  did  not  under  Section  49  ascertain  these  rates  by 
adding  up  all  the  separate  rates  as  originally  levied  and  reducing 
them  to  5.  He  must  take  the  County  and  Sanitary  District  as 
already  fixed,  and  his  rates  then  will  be  the  County  (fixed),  San¬ 
itary  District  (fixed),  the  City  corporate,  the  School  Board,  the 


9 


Public  Library,  the  West  Town  and  the  West  Park  rates — all 
except  the  first  two  as  originally  levied.  Now,  anyone  can  see 
at  a  glance  that  a  great  difference  will  be  made  to  the  Chicago 
rate  by  the  fact  that  the  County  and  Sanitary  District  rates  are 
already  fixed.  It  made  a  difference  in  the  proportion  when  the 
reduction  of  the  City  rate  was  made.  A  still  greater  difference 
was  made  in  the  County  and  Sanitary  District  rates.  Those 
rates  would  have  been  fixed  in  the  West  Town  had  it  not  been 
for  the  desire  of  the  school  trustees  either  of  Riverside  or  of  Dis¬ 
trict  No.  5  to  add,  no  doubt  properly,  to  their  expenditures ;  be¬ 
cause,  of  course,  the  higher  any  rate  is  made  the  lower  will  be 
all  the  others  after  the  reduction  has  been  worked  out. 

Both  the  City  and  Sanitary  District  and  the  Board  of  Edu¬ 
cation  filed  petitions  for  mandamus  against  the  County  Clerk 
to  compel  him  to  extend  the  taxes  in  the  same  old  way  without 
the  reduction.  The  question  also  was  raised  in  a  case  which 
went  to  the  Supreme  Court  in  December,  1899 — which  was  a 
general  attack  on  the  Act.  The  City's  case  is  Knopf  v.  The  Peo¬ 
ple,  185  Ill.  20.  The  ground  upon  which  the  Act  was  held  un¬ 
constitutional  is  very  plain.  You  will  remember  the  Constitution 
of  this  State  provides  that  no  special  act  shall  be  passed  where  a 
general  law  can  be  made  applicable.  This  act  was  held  uncon¬ 
stitutional  as  against  this  provision  of  the  Constitution  for  the 
reason  that  villages  and  towns  had  their  tax  levies  affected  not 
because  of  any  characteristic  in  themselves,  but  for  the  mere  rea¬ 
son  that  they  were  situated  in  a  county  having  125,000  inhabitants. 
The  City  of  Evanston  was  the  example  taken  by  the  Court.  There 
are  half  a  dozen  cities  in  the  State  of  about  the  same  size — 
Joliet,  Aurora,  Springfield  and  Quincy.  Now,  there  is  no  legal 
reason  why  Evanston  should  have  its  taxes  reduced  to  5  per 
cent,  that  would  not  also  apply  to  these  other  towns.  The  only 
reason  why  Evanston  was  subjected  to  the  operation  of  the  Act 
was  because  of  the  mere  fortuitous  circumstance  of  its  being 
situated  in  a  county  of  125,000  inhabitants.  There  is  a  plain 


10 


difference  between  this  point  and  the  point  that  arises  in  cases 
where  a  law  is  made  applicable  only  to  cities  of  a  population 
greater  than  100,000.  Such  statutes  have  been  held  valid  in  many 
cases,  where  there  was  a  rational  connection  between  the  classifi¬ 
cation  adopted  and  the  subject  matter  of  the  Act. 

An  amusing  feature  of  the  case  came  from  an  argument 
made  for  the  constitutionality  of  the  act  to  the  effect  that  for 
many  years  the  tax  payers  had  not  told  the  truth  about  their 
personal  property,  and  that  Section  49  was  an  inducement  to 
them  to  tell  the  truth.  In  the  preceding  year,  1899 — the  Court 
was  told — they  had  come  forward  to  a  greater  extent  than  be¬ 
fore  and  told  the  truth  about  their  personal  property.  Having 
done  this,  it  was  claimed  it  would  now  be  unfair  not  to  reduce 
the  rate  as  promised.  The  argument  was  that  the  tax  payer 
had  been  deceived  into  truthfulness  and  cajoled  into  honesty. 
The  Supreme  Court  made  short  work  of  this  argument. 

So  Section  49  came  to  an  end  by  the  Knopf  decision.  That 
was,  as  I  have  told  you,  late  in  January,  1900.  That  year  the 
Legislature  did  not  sit,  it  being  an  even  year.  A  great  clamor 
was  raised  against  assessing  the  taxable  property  that  year 
upon  its  real  value,  for  the  reason  that  Section  49's  reduction 
no  longer  existed.  The  Assessors  and  the  Board  of  Review 
yielded  to  the  outcry.  The  assessed  valuation  for  Chicago  in 
1898  had  been  $226,000,000  for  the  real  value ;  in  the  year  1899, 
under  the  new  act,  it  jumped  to  $345,000,000  for  the  assessed 
valuation,  which  was  one-fifth  of  the  real  value,  but  upon 
Section  49  being  found  invalid  by  the  courts,  the  Assessors 
and  the  Board  of  Review  deliberately  and  arbitrarily  reduced 
the  assessment  both  of  real  estate  and  personal  property,  so 
that  the  total  assessed  valuation  was  set  for  1900  at  $276,- 
000,000.  You  can  explain  this  action  as  you  choose.  It  was 
unquestionably  a  breach  of  the  law. 

We  come  at  last  to  the  operation  of  the  Juul  Act.  On  the 
whole,  I  believe  this  law  to  be  a  vicious  one.  There  is  a  feel¬ 
ing  abroad  in  this  city  that  any  man  who  thinks  ill  of  the  Juul 
Act  is  necessarily  a  bad  citizen.  The  only  good  quality  of  the 


11 


Act  is  that  it  makes  the  rates  low;  and,  of  course,  it  is  better 
to  have  low  rates  of  taxation  than  high  rates,  provided  you  get 
the  things  which,  as  a  city,  you  need.  But  as  far  as  the 
element  of  definiteness  goes,  the  Juul  Act  is  a  very  little  im¬ 
provement  on  the  law  as  the  law  stood  before  its  passage  or 
before  the  passage  of  Section  49.  Any  taxpayer  in  any  part 
of  Cook  County,  if  he  took  the  trouble  to  investigate,  could 
ascertain  the  maximum  aggregate  of  the  rates  which  he  would 
have  to  pay.  The  city  can  only  levy  2  per  cent  for  corporate 
purposes.  As  to  its  levy  for  bonded  indebtedness,  no  act 
which  the  Legislature  could  pass  can  reduce  that.  And  the 
levy  for  bonded  indebtedness  is  limited,  too,  for  it  can  only 
be  each  year  for  interest — which  would  certainly  not  be  more 
than  5  per  cent  on  the  total  of  the  debt — and  sinking  fund, 
which  would  be  just  that  amount,  that  is  to  say,  an  amount 
sufficient  to  retire  the  indebtedness  at  the  end  of  twenty  years. 
Now  the  debt  limit  is  5  per  cent  of  the  assessed  value.  That 
will  give  you  as  the  maximum  tax  for  bonded  indebtedness  one- 
half  of  1  per  cent.,  or  5  mills  on  the  dollar  of  assessed  valu¬ 
ation.  So,  you  see  even  the  levy  protected  by  the  constitution 
has  its  limit.  The  county  can  only  levy  .75  per  cent  and  about 
.04  per  cent  in  addition  for  indebtedness  outstanding  before 
the  adoption  of  the  Constitution  of  1870.  The  West  Town 
and  West  Park  aggregate  1.35  per  cent,  and  cannot  be  more 

than  this.  The  Public  Library  tax  is  .  10  per  cent.  The 
maximum  rate  of  the  Board  of  Education  for  educational  pur¬ 
poses  is  2.50  per  cent,  and  the  aggregate  rate  of  the  Sanitary 
District  is  or  should  be  .50  per  cent.  These  come,  all  told,  to 
7.74  per  cent.  As  a  matter  of  fact,  they  never  have  been  levied 
to  such  an  extent;  but,  at  all  events,  it  is  clear  that  the  Juul 
Act  does  not  bring  any  more  definiteness  to  the  rates  than 
existed  before  its  passage.  Many  real  estate  men  around  town, 
and  a  great  many  property  owners,  will  tell  you  that  the 
Juul  Act  was  carried  about  in  the  Ark  of  the  Covenant,  and 
that  there  is  something  peculiarly  sacred  about  it.  But  that  is 


12 


not  so.  You  will,  I  believe,  find,  on  the  contrary,  that  it  is  a 
very  inadequate  and  sloppy  piece  of  legislation. 

It  is  time,  however,  that  you  learned  what  the  Act  is  about. 
It  is  an  act  of  the  General  Assembly,  entitled  “An  Act  Con¬ 
cerning  the  Levy  and  Extension  of  Taxes/'  approved  May  9, 
1901,  in  force  July  1,  1901.  The  County  Clerk  is  directed  to 
ascertain  the  rates  per  cent  required  to  be  extended  upon  the 
assessed  valuations  of  the  taxable  property  in  the  respective 
towns,  townships,  districts,  incorporated  cities  and  villages  in 
his  county,  to  produce  the  amounts  certified  by  the  taxing 
bodies  for  extension.  The  rate  per  cent  of  course,  is  found 
by  dividing  the  amount  asked  for  by  the  valuation.  If  the 
aggregate  of  all  the  taxes,  exclusive  of  state,  village,  levee,  all 
school  taxes,  road  and  bridge  taxes  and  bonded  indebtedness 
taxes,  where  the  bonded  indebtedness  exceeds  10  per  cent,  of 
the  valuation,  exceeds  5  per  cent,  they  must  be  reduced  pro  rata 
to  5  per  cent.  This  sounds  just  like  old  Section  49,  except 
that  there  are  more  exclusions.  That  is  just  where  the  dif¬ 
ference  comes  in,  because  the  exclusions  are  so  great  that  if 
the  Act  stopped  here,  there  would  be  no  reduction  at  all.  In 
Riverside,  where  the  first  reduction  took  place  four  years 
ago,  you  would  have  all  school  taxes  excluded,  all  village 
taxes,  and  road  and  bridge  taxes.  These  three  kinds  of  taxes 
in  1889  came  to  about  4  per  cent  upon  the  assessed  valuation. 
Without  these,  the  taxes  subject  to  reduction  would  come  to  a 
little  over  3  per  cent.  Hence,  in  Riverside,  there  is  now  no 
reduction  at  all  of  the  aggregate  rates.  The  only  reduction  is 
an  indirect  one,  arising  from  the  reduction  which  takes  place 
in  Chicago,  of  the  County  and  Sanitary  District  rates,  both  of 

which  also  cover  Riverside.  The  Act  was  not  intended  to  re¬ 
duce  taxes  anywhere  except  in  Chicago,  hence  it  begins  by 
excluding  from  the  reduction  enough  taxes  to  prevent  any 
reduction  anywhere.  You  then  come  to  the  proviso  which 
lands  the  reduction  in  Chicago  as  follows: 


13 


“Provided  further,  in  reducing  tax  levies  hereunder  all 
school  taxes  levied  in  cities  exceeding  100,000  inhabitants, 
with  the  exception  of  the  levy  for  school  building  purposes, 
shall  be  included  in  the  taxes  to  be  reduced.”  Now  see  how 
this  works.  Chicago  is  a  city,  not  a  village.  A  village  tax  is 
excluded  from  the  reduction,  but  not  a  city  tax.  Chicago  has 
no  levee  tax.  That  exclusion  was  for  the  purpose  of  prevent¬ 
ing  the  reduction  from  taking  place  in  the  counties  along  the 
Mississippi.  The  tax  for  educational  purposes,  which  is  ex¬ 
cluded  generally  but  included  in  the  reduction  here,  amounts 
to  2.50  per  cent.  You  will  find  that  what  it  really  provides 
is  this :  That  in  cities  of  over  100,000  inhabitants  there  shall 
be  a  reduction  of  the  aggregate  rates  down  to  5  per  cent  of 
the  assessed  valuation  if  those  aggregate  rates,  exclusive  of 
the  state  rate  and  the  school  building  rate,  shall  exceed  5  per 
cent.  In  other  words,  the  act  provides  that  such  reduction 
shall  take  place  in  Chicago,  and  nowhere  but  in  Chicago. 

What  I  wish  to  do  tonight  is  to  point  out  two  or  three 
facts  in  the  mode  of  operation  of  this  act  which  have  been 
brought  to  my  attention,  which  I  think  are  inconsistent  with 
any  rational  system,  either  of  municipal  taxation  or  municipal 
finance.  First  of  all,  let  us  see  what  the  County  Clerk  does 
as  a  practical  matter.  It  is  just  the  same  operation  as  that 
which  I  described  to  you  as  taking  place  when  Section  49  was 
in  force,  except  that  the  reduction  by  the  County  Clerk  for 
districts  where  the  rate  exceeds  5  per  cent  is  now  limited  to 
Chicago.  He  ascertains  the  rates  levied  by  all  the  taxing  dis¬ 
tricts  in  Chicago.  He  then  searches  for  that  part  of  Chicago 
which  has  the  highest  aggregate  rate  of  taxation,  which  is  the 
Town  of  West  Chicago.  Every  municipality  since  the  passage  of 
the  Juul  Act  has  been  levying  its  full  rate  in  order  to  save  itself 
on  the  reduction.  That  rate  amounts  in  the  Town  of  West 
Chicago  to  7.55  per  cent  of  the  assessed  valuation.  That,  of 
course,  excludes  state  taxes  and  the  taxes  for  school  building 


14 


purposes  of  the  Board  of  Education.  This  aggregate  is  then 
reduced  by  the  application  of  the  rule  of  three  to  five  per 
cent,  of  the  assessed  valuation.  That  is,  as  5  is  to  7.55,  so  X  is 
to  the  amount  originally  levied  by  the  particular  municipality. 
The  reduction  is  made  pro  rata  throughout. 

The  framers  of  the  law  wholly  disregarded  the  fact  that 
when  you  come  to  ascertain  the  various  rates,  the  boundaries 
of  the  various  taxing  bodies  whose  rates  are  reduced  differ 
wholly  in  area  and  in  amount  of  assessed  valuation.  For  the 
Sanitary  District,  which  takes  up  the  whole  of  the  city  and 
much  outlying  territory,  the  assessed  value  of  the  taxable 
property  in  1903  was  $431,000,000.  For  the  county  itself  it 
was  about  $440,000,000.  For  the  city  it  was  a  little  more 
than  $411,000,000.  The  city  levies  which  are  assessed  against 
$411,000,000  include  the  City,  the  Public  Library  and  the 
School  Tax.  The  tax  on  the  West  Side  was  levied  against  the 
$89,000,000  of  taxable  property  in  the  Town  of  West  Chicago. 
Against  the  county  valuation  there  was  levied  the  county  tax. 
It  will  be  plain  at  once  from  a  mere  application  of  arithmetic 
that  in  this  svstem  of  reduction  from  7.55  to  5,  each  fraction  in 
the  rate  of  every  taxing  body  has  exactly  the  same  value  as  the 
same  fraction  in  the  rate  of  any  other  taxing  body.  But  the 
assessed  valuation  of  taxable  property  against  which  these  rates 
are  levied  are  very  different. 

This  brings  me  to  the  first  example.  In  the  year  1901 
an  act  was  passed  authorizing  the  authorities  of  the  Town  of 
West  Chicago  to  issue  bonds  to  the  extent  of  one  million 
dollars  for  the  acquisition  and  maintenance  of  small  parks  and 
pleasure  grounds,  and  to  raise  a  tax  of  one  mill  on  the  dollar 
for  the  purpose  of  maintenance  and  of  paying  the  interest  on  these 
bonds  and  their  sinking  fund.  If  that  tax  had  not  been  levied  last 
year,  instead  of  there  being  an  aggregate  rate  of  taxation  of  7.55 
per  cent,  it  would  have  been  7.45  per  cent.  This  difference 
in  the  rates  seems  to  represent  an  extremely  small  amount  of 


15 


money ;  but  the  result  of  it  was  this,  that  that  mill  on  the  dollar, 
or  ten  cents  on  $100  of  taxable  property,  when  distributed  be¬ 
tween  the  other  taxing  bodies,  made  a  loss  to  the  City  of 
Chicago  of  a  little  over  two  and  a  half  cents  on  the  hundred 
dollars.  That  ten  cents  was  so  spread  over  the  other  taxing 
bodies  that  the  loss  to  the  Sanitary  District  was  about  one 
cent,  and  the  loss  to  the  County  about  the  same.  The  loss  to 
the  schools  was  something  like  three  cents  on  one  hundred 
dollars  valuation.  The  result  of  it  was  this,  that  the  levy  pro¬ 
duced  for  the  West  Park  Board  on  a  valuation  of  $89,000,000, 
$89,000.  Now,  as  the  Juul  Act  cuts  down  the  levies  about  33 
per  cent,  this  $89,000  was  reduced  to  about  $60,000  or  $61,000, 
so  that  all  that  the  Town  of  West  Chicago  or  the  West  Park 
Board  received  for  the  purposes  of  its  small  parks  and  pleasure 
grounds  under  the  Act  of  1901  was  about  $61,000.  The  City 
of  Chicago  suffered  a  reduction  of  about  two  and  a  half  cents 
on  the  hundred  dollars  by  reason  of  that  additional  tax  for  the 
West  Park  system.  As  the  assessed  valuation  of  the  city’s 
taxable  property  was  $411,000,000,  the  additional  reduction  of 
two  and  a  half  cents  amounted  to  about  $100,000.  This  sum 
the  City  of  Chicago  actually  lost  by  reason  of  the  West  Town 
getting  $61,000  net.  .  The  loss  to  the  school  system  of  Chicago 
from  the  same  cause  was  something  like  $130,000 ;  the  loss  to 
the  County,  $50,000 ;  the  loss  to  the  Sanitary  District  perhaps 
$30,000.  The  total  loss  to  all  the  taxing  districts  could  not 
have  been  less  than  $300,000.  Now,  that  was  loss  outright. 
The  taxing  bodies  were  out  that  much  money,  which  they 
would  have  got  if  the  law  of  1901  had  not  been  passed  and  the 
levy  made.  Now,  it  seems  to  me  that  an  act  which  works  in 
that  way  can  hardly  be  called  consistent  with  any  system  of 
finance  or  legitimate  taxation.  It  would  have  been  much 
better,  as  any  one  can  see,  if  it  could  legally  have  been  done, 
for  the  City,  the  Sanitary  District,  and  the  County,  to  chip  in 


16 


and  pay  that  $61,000  over  to  the  West  Park  Board  for  its 
small  park  purposes,  and  save  their  own  money. 

I  would  like  to  call  your  attention  to  another  case  of  a  like 
nature  in  the  operation  of  the  Juul  Act.  The  Sanitary  Board,  as 
we  all  know,  is  the  corporation  which  conducts  and  maintains 
the  Drainage  Canal.  The  City  of  Chicago  is  wholly  dependent  ? 

for  the  purity  of  its  water  supply  on  the  maintenance  of  that  sys¬ 
tem.  The  maintenance  of  it  is  an  extremely  important  and  costly 
matter.  The  Chicago  River  has  to  be  deepened.  The  intercept¬ 
ing  sewer  system  in  construction  at  Thirty-ninth  Street  on  the 
south  and  at  Lawrence  Avenue  on  the  north  has  to  be  built  and 
then  kept  up.  The  maintenance  of  all  that  system  will  take  a 
great  sum  of  money,  a  very  large  annual  sum.  Now,  the  Sani¬ 
tary  District  of  Chicago  has  had,  under  the  statute  creating  it, 
since  1899  (the  time  of  the  completion  of  the  Main  Drainage 
Channel)  a  tax  rate  of  fifty  cents  upon  the  hundred  dollars;  one- 
half  of  one  per  cent,  (or  5  mills  on  the  dollar)  on  the  assessed 
valuation.  It  has  a  riglit  to  an  indebtedness  of  $15,000,000,  and 
under  the  Constitution  of  the  State  and  the  statute  it  must,  as 
must  all  municipalities,  levy  every  year  a  sinking  fund  for  the 
retirement  of  its  indebtedness  within  twenty  years  and  must  levy 
for  the  payment  of  interest  on  its  indebtedness.  This  levy  will 
amount  to  about  ten  per  cent,  of  this  $15,000,000.  That  comes  to 
about  $1,500,000,  which  the  Sanitary  District  must  levy  under 
the  Constitution  every  year  for  the  payment  of  its  bonds.  That 
amounts  to  a  rate  on  its  valuation  equal  to  about  34  cents  on  the 
hundred  dollars.  It  has  to  have,  as  I  say,  this  thirty-four  cents 
on  the  dollar,  which  cannot  be  reduced;  yet  under  the  operation 
of  the  Juul  Act,  which,  as  I  said  before,  cuts  down  the  taxes  that 
are  asked  for,  about  thirty-three  per  cent,  you  have  seventeen 
cents  taken  off  of  fifty  cents.  So,  instead  of  having  thirty-four 
cents  with  which  to  pay  the  bonded  indebtedness  of  the  Sanitary  - 

District,  you  have  about  thirty-two  cents,  or  thirty-three  cents  in 
all — not  enough  to  pay  the  bonded  indebtedness  alone,  and  not 


17 


a  cent  left  for  the  maintenance  of  the  Sanitary  District  and  the 
purification  of  the  water  supply  of  the  City. 

Well,  the  authorities  who  spread  the  taxes  in  Cook  County 
were  in  a  great  difficulty.  They  did  what  it  always  seemed  to 
me  their  duty  called  upon  them  to>  do.  They  arbitrarily  and  un¬ 
lawfully,  without  any  regard  to  the  Juul  Act,  staring  them  in 
the  face,  gave  the  Sanitary  District  about  20  or  25  cents  out  of 
hand.  The  Sanitary  District  had  no  more  right  to  this  increase 
than  the  City  of  Chicago  has  a  right,  for  corporate  purposes,  to 
levy  a  two  and  a  half  per  cent,  tax  instead  of  two  per  cent.  That 
illegal  increase  of  the  Sanitary  District's  tax  has  been  made  two 
years  running  to  my  knowledge.  It  will  probably  be  made  again 
next  month.  The  difficulty  arose  from  no  other  reason  than  the 
operation  of  the  Juul  Act,  because  if  there  were  not  that  reduc¬ 
tion,  or  if  the  Sanitary  District  were  excluded  from  the  reduction, 
you  would  have  the  bond  levy  made  and  have  sixteen  cents  for 
maintenance.  Now,  I  say  that  a  scheme  that  reduces  thus  the 
taxes  of  a  municipal  corporation  that  is  of  such  stupendous  neces¬ 
sity  to  this  whole  community  as  is  the  Sanitary  District  is  utterly 
bad.  It  seems  as  if  the  framers  and  supporters  of  the  Juul  Act 
thought  of  nothing  but  the  selfish  object  of  getting  a  reduction 
in  their  taxes  regardless  of  the  welfare  or  even  the  health  of  the 
community. 

The  only  other  illustration  of  the  operation  of  the  Juul 
Act  that  I  wish  to  call  attention  to  is  this :  In  the  year  or 
two  prior  to  the  first  of  last  January,  the  Public  Library  Board 
of  this  city  had  amassed  a  savings  of  $125,000  or  $130,000. 
When  I  say  “savings,”  I  mean  that  in  the  two  years  the  ex¬ 
penditures  of  the  Public  Library  have  been  about  $125,000 
less  than  the  income,  and  the  Board  in  consequence  had  been 
able  to  reduce  their  anticipations  of  tax  levies  about  that 
extent.  The  City  of  Chicago  was,  of  course,  in  hard  straits. 
When  the  Library  Board  came  around  to  the  Finance  Com¬ 
mittee  to  get  its  annual  appropriation,  it  was  very  naturally 


18 


suggested  by  the  members  of  the  committee  that  the  Library 
Board,  being  so  much  better  off  than  any  other  city  depart¬ 
ment,  having  this  large  sum  put  away,  should  get  this  year  a 
less  amount  by  perhaps  two  cents.  When  I  say  two  cents,  I 
mean  that  the  Library  Board  is  allowed  by  law  a  tax  of  ten 
cents  on  the  hundred  dollars  of  assessed  valuation,  and  the 
suggestion  was  that,  instead  of  getting  that  full  amount,  it 
should  receive  eight  cents.  That  would  have  amounted  to  a 
loss  to  the  Library  Board  of  about  $82,000.  Their  revenue 
would  have  been  cut  down  about  that  much.  The  point  was 
then  made  to  the  Finance  Committee  that  it  was  true  that  the 
Library  Board’s  income  could  be  cut  down  by  $82,000,  but 
where  would  the  money  go?  Under  the  Juul  Act  the  City  of 
Chicago  gets  about  twenty-five  per  cent  of  all  the  taxes.  The 
County  gets  about  fifteen  per  cent,  and  the  whole  of  it  is 
divided  up  in  that  way  between  six  or  seven  taxing  bodies, 
but  the  share  of  the  City  of  Chicago  which  the  Finance  Com¬ 
mittee  were  endeavoring  to  conserve  would  be  only  about 
twenty-five  per  cent  of  that  $82,000.  The  value  of  the  two 
cents  taken  from  the  Library  would  be  spread  in  the  reduction 
among  all  the  taxing  bodies  proportionately. 

CONSTITUTIONALITY  OF  THE  JUUL  ACT. 

I  believe  the  Juul  Act  contravenes  certain  provisions  of  the 
Constitution  of  1870.  The  last  paragraph  of  Section  22,  Article 
IV.,  provides  that  “in  all  other  cases  where  a  general  law  can 
be  made  applicable,  no  special  law  shall  be  enacted.”  I  find  no 
reasonable  distinction  between  the  character  of  Section  49  and 
that  of  the  Juul  Act  in  respect  to  this  provision  of  the  Constitu-  ^ 

tion.  The  proposition  can  be  put  in  a  nutshell.  It  is  this :  Sec¬ 
tion  49  of  the  Revenue  Act  of  1898  was  held  to  contravene  this 
provision  of  the  Constitution,  by  reason  of  the  fact  that  a  mu-  v 

nicipality,  such  as  Evanston,  had  a  change  worked  in  its  rates 
of  taxation  for  the  sole  reason  that  it  was  situated  in  a  county 


19 


having  125,000,  or  more,  inhabitants.  The  Juul  Act  contravenes 
the  same  provision  of  the  Constitution  in  that  a  municipality,  such 
as  Evanston,  has  a  change  worked  in  its  rates  of  taxation  for  the 
mere  reason  that  it  is  situated  in  a  county  in  which  there  is  a 
city  having  100,000  inhabitants. 

^  In  the  case  of  Section  49,  no  rational  connection  could  be 

found  between  the  reduction  of  the  taxes  of  various  municipali¬ 
ties  and  the  fact  of  Cook  County  having  1 25,000  inhabitants. 
There  is  even  less  connection  between  an  alteration  of  the  taxes 
of  Evanston  and  the  fact  that  Evanston  lies  in  a  county  in  which 
there  is  a  city  with  100,000  inhabitants.  I  will  give  you  an  ex¬ 
ample  which,  perhaps,  may  bring  out  more  clearly  the  absence 
of  any  link  in  reason  between  the  object  of  the  Act  and  the  mode 
of  classification  adopted.  The  object  of  the  Act  is  the  reduction 
of  the  rates,  in  cities  of  100,000  people,  to  5  per  cent,  of  the 
assessed  valuation.  That  is  the  direct  object.  The  indirect  object, 
which  does  not  show  on  the  face  of  the  Juul  Act,  is  to  effect  a 
reduction  of  the  rates  of  every  municipality  in  Cook  County,  in¬ 
asmuch  as  the  county  rate  is  of  necessity  reduced.  The  example 
I  have  in  mind  is  this :  The  municipality  of  La  Grange  is  situ¬ 
ated  a  mile  or  so  east  of  the  western  boundary  of  Cook  County. 
The  municipality  of  Hinsdale  lies  a  mile  and  a  half,  or  so,  west 
of  La  Grange  and  just  over  the  boundary  of  Cook  County.  Du 
Page  County,  in  which  Hinsdale  lies,  contains  no  city  with  100,- 
000,  or  more,  inhabitants.  Hinsdale  and  La  Grange  are  as  like 
as  any  two  suburban  towns  could  well  be.  It  would  be  impossible 
to  pick  out  any  essential  or  characteristic  distinction  between 
them,  yet  the  tax  rates  of  La  Grange  are  altered  for  the  mere  fact 

$  mat  La  Grange  lies  within  the  same  county  as  Chicago.  Hins¬ 
dale,  being  two  miles  further  west,  has  all  its  taxes  stand  as  orig¬ 
inally  levied  by  the  various  taxing  bodies. 

*  If  the  Juul  Act  is  unconstitutional,  as  I  believe  it  to  be,  I  see 

no  reason  why  its  constitutionality  should  not  be  attacked  by 
proper  proceeding.  Its  absurd  features  could  be  remedied,  if 


20 


under  the  constitutional  amendment  a  consolidation  of  the  Chi¬ 
cago  towns  is  made,  and  the  reduction  of  the  aggregate  rates 
to  5  per  cent,  might  be  held  valid  if  the  provision  affected  Chicago 
alone.  Certainly  no  one  is  bound  to  keep  one’s  hands  oil  this 
piece  of  legislation.  At  the  time  when  its  passage  was  being 
urged  before  the  General  Assembly,  help  was  sought  on  all  sides. 
A  distinct  arrangement  was  made  that  if  the  city  authorities  would 
not  fight  the  Act  after  its  passage,  the  city  taxes  for  bonded  in¬ 
debtedness  would  be  excluded  from  the  reduction  in  the  sense  that 
the  state  and  school  building  taxes  are  excluded.  This  agree¬ 
ment  was  not  kept  by  those  who  had  in  charge  the  effort  to  pass 
the  bill.  The  city  authorities  have  been  only  too  scrupulous  in 
adherence  to  their  side  of  the  bargain. 


